didn't read all reply's thoroughly, sorry, but somone was on the right path;

it's a qin na.

a) with my right hand i grab opponents left wrist, forearm, fingers, whatever.

b) i withdraw my right hand "chambering" it, i.e. i twist my opponents limb, simultaneously striking out with my left hand. as i twist, the opponents body will naturally follow the direction of the energy, in other words, they will lean into the twist to try and save their joints. at this point, depending on where you have grabbed, you may have already torn, dislocated or broken something. if not.......

c) since my opponents is already off balance and presumably stunned from my strike it's easy to step the right leg behind my center line in an arc, with the direction of my twisting energy which has already been applied, while hooking the left hand behind my opponents neck finishing with a throw.

Good topic to discuss guys and also good insights. Victor that was good link. Punch is chambered mainly to concentrate ur chi to a central point and to get prepared for your opponents attack. It is the only place from where u can block many types of attacks. u can increase the power of your punch. It is mainly to block ur opponents attack at last movement and surprise him by ur fast and powerful attack.

just a warning: if the hand / arm is fully rotated when the strike lands, the radius and ulna are crossed and jam together, and you put yourself at high risk for a spiral fracture.

Some of my thoughts on the height of the chambered hand:

In my current school (Yu Lung Kung Fu), we tend to keep the arm as straight as possible for the most part, since it is hard to bend an arm that can quickly lock in, lending power to a strike.

My last school (Karate) maintained a chambering position as high as possible below the shoulder, giving a highly flexed rear arm. This seemed to facilitate rear empi strikes and made my forward strikes more linear, but weakened locks and throws.

In contrast, the former (waist) chamber enables me to balance more easily by lowering my centre of gravity. If both hands are chambered at the waist, I find it very beneficial for stance training as my centre of mass is further forward. Therefore, when I move my arms out in front for a technique, I find it easier to project forward.

[edited for readability]

In my experience, the chambering of the fist has a few good uses. I think it is to help the rotation of the waist in the punch, and to balance out the forward motion of the punching hand. More usefully, it could be a simultaneous grab/hit or elbow strike as a few already have mentioned.
It could be a block, or it could be used as a subtle guide to off center the opponents strike as you strike him, or any number of things. Im sure it has as many uses as you can think of.

oi, i can't takes no more!

http://www.youtube.com/watch?v=a-SsaFA6Rjg

lots of good things mentioned here
yea chambering isnt exactly practical n stuff but there is more than meets the eye.
just in general when you see a technique dont just take it for what it is, because behind the movement there is so much more!

OK chambering, yes delivers more power to the punch. But if you look at the chambering motion it is you pulling your hand back in. What can this be used for?? Like mentioned before, an elbow strike, PULLING and I would also like to add that back in the days, when swords were actually used, your sword would be where your fist is. Well atleast the sheath would be.
I know that in Aikido, some techniques are derived from having this chambered fist, whether attacking or defending. And if you were holding a sheath then shooting your arm out could be you deflecting something with the sheath?? And punches could translate into you stabbing someone, kinda like a fencing lunge. Only you wont be lunging...oh yea this is just a theory of mine, correct me if needed

Also when translating a technique into its applicable cousin you shouldnt think that you must pull the fist all the way back to your side. If you were pulling then a slight jerk would suffice (kinda like the tip of your elbow to your side). Hopefully you see what I'm saying

Keeping your fist at hip level allows you to hide it better during full body rotation so whoever you're punching doesn't see it until it's damn near too late.